Motorists in the UK and EU should not anticipate a sharp decline in electric vehicle costs despite heightened competition among Chinese manufacturers, according to a top executive from one of China's leading EV makers.
Quality Over Price Wars
Brian Gu, vice-chair of Xpeng, stated that Chinese carmakers can compete on quality to win over customers in the EU and UK, rather than engaging in a brutal price war as seen in China. Chinese automakers have rapidly ascended to dominate the global EV industry, bolstered by substantial government subsidies and lower labour costs compared to the US, Europe, Japan, and Korea.
The UK is poised to relax its 2030 EV sales targets following industry and union pressure. In China, the sheer number of competitors—129 last year according to AlixPartners—led to aggressive price cuts. President Xi Jinping intervened last year, urging provincial governments to curb subsidies to mitigate the damage. Facing such domestic pressure, well-funded Chinese manufacturers like Xpeng have turned to Europe to seek profits.
Xpeng's European Ambitions
Xpeng, named after founder He Xiaopeng, remains loss-making due to heavy spending on research and expanding European sales, starting with the £39,990 electric G6. The company sold only 7,300 cars in Europe in the first quarter of 2026, according to analyst Matthias Schmidt. However, it aims to accelerate and compete with other Chinese giants such as BYD, Chery, Changan, Geely, and SAIC (owner of MG).
When asked about the possibility of a European price war mirroring China's, Gu said, "I don't see it coming." Speaking at a London event earlier this month, he noted that while some Chinese rivals are "pouring a lot of products" into the UK and Europe, there will not be a race to lower prices. In contrast, Chinese brands in Southeast Asia or emerging markets have focused on "just being cheaper."
"I think the customer in Europe, especially customers in the developed markets, the focus is on quality and differentiation more than cost," Gu explained.
Tech Differentiation and Robotaxis
Xpeng has drawn comparisons to Tesla due to its minimalist designs and ambitions to sell humanoid robots. The company is also developing flying taxis. To stand out, Xpeng emphasizes hi-tech features, particularly autonomous driving capabilities. Its driver assistance features are widely available, and it plans to launch robotaxis in its home city of Guangzhou. It could introduce more driverless technology to Europe in the first half of next year if the EU adopts new UN standards.
Gu, a former JP Morgan banker who oversaw Xpeng's 2020 NYSE listing, said the company can rapidly catch up with Waymo, Baidu, and Wayve. "We can accelerate much faster than some of the robotaxi companies," he said, because Xpeng develops cars, computer chips, and driverless software simultaneously.
European Production Plans
Xpeng is also evaluating options to build more cars in Europe. It currently partners with Magna, an Austrian contract manufacturer, but noted that struggling European carmakers with excess factory space are "coming to us with various projects" to sell plants. Xpeng previously revealed that Volkswagen—which partnered with the company in 2023—offered a German plant for sale, though another executive last month called it "a little bit, I would say, old."
